Case Report – NBCA says Federal Court is proper forum for PIPEDA challenge

On January 22nd, the New Brunswick Court of Appeal held that the Federal Court is the proper forum for a broad challenge to the powers granted to the federal Privacy Commissioner by PIPEDA.

The Court held that the matter was essentially a request for judicial review of an OPC decision despite the applicant’s constitutional validity argument, which it had made in the alternative. Given this characterization, the Court held that the Federal Court was the proper forum.

This is not a privacy judgement, but it is nonetheless worth note given the thrust of the applicant’s substantive objection. As a defendant’s insurer, it claimed the OPC had no jurisdiction to deal with its video surveillance of a plaintiff. The Court explained the argument as follows:

State Farm raises a core issue in its application: whether it engaged in “commercial activity” within the meaning of PIPEDA when it collected information about Mr. Gaudet in discharging its duty to defend Ms. Vetter. It contends that the only relationship that exists between Mr. Gaudet and Ms. Vetter stems from the accident, which is not a commercial activity. Section 4 of PIPEDA applies to the collection, use and disclosure of personal information in the course of commercial activities. “Commercial activity” is defined in PIPEDA as a transaction, act, or regular course of conduct that is of a “commercial character”. Whether State Farm’s actions amounted to “commercial activity” is the very question the Privacy Commissioner must investigate and report on in accordance with her mandate and expertise.

The resolution of this argument would have broad significance in defining the meaning of PIPEDA’s application provision, which triggers application where an organization collects, uses or discloses personal information “in the course of commercial activity.” The OPC considered a similar case in 2006 and held, perhaps surprisingly, that it had jurisdiction to investigate two lawyers who collected information on behalf of their “commercial” clients. Some would argue that Parliament did not intend a collection through a paid agent to trigger application. Others would argue that application based on this theory raises constitutional issues where it attracts PIPEDA application to information flows that are, in their essence, about matters within the exclusive jurisdiction of the provinces such as property and civil rights and employment.

State Farm Mutual Automobile Insurance Company v. Privacy Commissioner of Canada, 2009 NBCA 5 (CanLII)

One thought on “Case Report – NBCA says Federal Court is proper forum for PIPEDA challenge

  1. I suggest that this is bad law. PIPEDA applies to commercial activities within jurisidictions such as New Bruwnswick which lack “substantially similar” private-sector privacy legislation. The matter therefore lies well within the remit of the the provincial superior courts.

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